Friday, 21 February 2014

Murray Rothbard's 10 Great Economic Myths

Myth 1: Deficits are the cause of inflation; deficits have nothing to do with inflation.

Myth 2: Deficits do not have a crowding-out effect on private investment.

Myth 3: Tax increases are a cure for deficits.

Myth 4: Every time the Fed tightens the money supply, interest rates rise (or fall); every time the Fed expands the money supply, interest rates rise (or fall).

Myth 5: Economists, using charts or high speed computer models, can accurately forecast the future.

Myth 6: There is a tradeoff between unemployment and inflation.

Myth 7: Deflation--falling prices--is unthinkable, and would cause a catastrophic depression.

Myth 8: The best tax is a "flat" income tax, proportionate to income across the board, with no exemptions or deductions.

Myth 9: An income tax cut helps everyone; not only the taxpayer but also the government will benefit, since tax revenues will rise when the rate is cut.

Myth 10: Imports from countries where labor is cheap cause unemployment in the United States.

Read Rothbard's discussions of each of these myths here